Joe Biden has pushed up energy prices by blocking leases for drilling on federal lands, closing down the Keystone XL project, and demonizing Big Oil with probes into spiking energy costs. He’s tossed out gleaming baubles like the release of two days worth of oil reserves into global markets as his declared “weapon” for driving down energy costs in the hopes that you won’t notice his other actions. Instead of the local pipelines and production, he has shut down. Joe Biden has pathetically implored the Saudis and OPEC sheiks to boost output.
The decision may primarily signal OPEC countries and Russia that the US is seriously lowering prices. The Saudis are concerned that sanctions on Iran would be lifted, allowing Iran to increase its oil output and compete with OPEC. Saudi Arabia has refused to raise output and has factored in the probability of an Iran nuclear deal.
Moreover, Saudi Arabia, dubbed the “anchor producer” in the oil market, has reduced output to boost or maintain the oil price. They require high pricing because they anticipate price reductions. What would be the outcome? If Joe Biden gets his Iran agreement with the Islamists approved and sanctions against Iran are lifted. Although Iran’s rulers are dragging their feet on the agreement, the Saudis are betting on it.
Every major oil producer understands that prices fluctuate. On the other hand, the Saudis believe it will happen at some time, whether sooner or later, and they are not taking any chances. The term “stupid” is rarely used in the oil sector, and no one has ever labeled the Saudis “dumb.” The Saudis keep output low, energy scarce, and prices high because of Joe Biden’s desire for a nuclear deal with Iran.